Perhaps he would prefer to have the right-wing National Rally party clearly in power in the assembly so that he can blame them for future problems.
Indeed, many of this year’s elections seem to involve voters wanting a change from whoever is currently in power, whether they are from them left or right. Investors would prefer Macron not to lose control of the assembly – especially as politics in Belgium, Holland and Spain all appear somewhat fraught currently.
But the big one is the US, whose equities now comprise 70 percent of all global equities by market cap. While most European commentators and newspapers seem to believe Joe Biden is the likely winner, the US press does not agree and nor do the polls.
This could lead to some market turbulence in the run up to polling day in November, and in the aftermath.
The big one
Trump’s declared policies are generally supportive of equities: tax cuts, less regulation, free markets. In his last presidency he spoke against Obamacare, but the companies involved were not greatly affected by his policies.
In this campaign the Republican party is more explicitly sceptical about climate change. This may well lead to a reduction in the tax breaks in Biden’s Inflation Reduction Act – especially as these are very significant sums.
Surprisingly, Trump’s policies of applying tariffs to Chinese goods seem now to have been taken further by the Biden administration, so both political parties seem to be taking the US in a more protectionist direction.
The major impact of a Trump victory may well simply be shock. US politics is difficult to assess from the outside the country. I try to read the US press to get a flavour of US election campaigns and avoid European press commentary.
In Europe we tend to apply our own norms, which are not always helpful. For instance, US justices have always been political figures and politicians have historically taken each other to court – something which, to Europeans, seems the behaviour of a banana republic.
Divisions seem to be deeper and more bad tempered in recent years, but the 19th century saw similar periods, and similar chaos.
Trump has shown himself to be an unpredictable president and markets do not like this characteristic. He will always back the US in any issue and that may include backing the US against Europe, preferring a win-lose deal to win-win deals.
He will be better prepared for government than he was in 2017 when he did not have policies or appointees for many departments – so a second presidency is likely to see more change than the last.
